The Alcohol Tariff Trade War: It’s Wine vs. Whiskey- Who Ya Got?
The tariff gamesmanship has officially reached the liquor cabinet, with U.S. President Donald J. Trump threatening 200% tariffs on wine and champagne from France and the European Union. This, of course, is in response to the region’s retaliatory 50% tariff on U.S. whiskey.
(If we’re choosing sides, I mean- we’ll go with Tennessee Whiskey, but we digress…)
Stocks fell on the news, as investors worried that Trump would enact stiffer trade barriers around the world’s largest consumer market. The S&P 500 finished the day more than 10% below its record high reached last month, confirming the benchmark index for U.S. stocks is in a correction.
Commenting from Truth Social, President Trump said:
“The European Union, one of the most hostile and abusive taxing and tariffing authorities in the World, which was formed for the sole purpose of taking advantage of the United States, has just put a nasty 50% Tariff on Whisky*,” Trump posted. “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES. This will be great for the Wine and Champagne businesses in the U.S.”
*(sic)
Later today, Mr. Trump posted: “The U.S. doesn’t have Free Trade. We have ‘Stupid Trade.’ The Entire World is RIPPING US OFF!!!”
The “bourbon tariffs” were announced by the EU on Wednesday in response to Trump’s 25% tariffs on steel and aluminum products.
The United States remains the world’s largest importer of both wine and champagne and sparkling wine, with wine at $4.9 billion in annual sales and champagne at more than $1.7 billion.
“We urge President Trump to secure a spirits agreement with the EU to get us back to zero-for-zero tariffs, which will create U.S. jobs and increase manufacturing and exports for the American hospitality sector. We want toasts not tariffs,” said Chris Swonger, president and CEO, Distilled Spirits Council of the United States.
A Reuters/Ipsos poll released on Wednesday found that 70% of Americans expect Trump’s tariffs to make regular purchases more expensive.
Trump said his alcohol tariffs would help domestic producers, but U.S. importers and distributors said it would lead to lost sales, layoffs and shuttered businesses.
Friends, what will happen tomorrow?
